Western National Mutual Ins. Co. v. Goldstein, No. A04-805 (MN 11/16/2004)

• Decision Date: 16 November 2004
• Docket Number: No. A04-805.,A04-805.
• Parties: Western National Mutual Ins. Co., Appellant, v. Paula Goldstein, Respondent.
• Court: Minnesota Supreme Court

Page 1

Unpublished Opinion

Western National Mutual Ins. Co., Appellant, v. Paula Goldstein, Respondent.

No. A04-805.

Court of Appeals of Minnesota.

Filed November 16, 2004.

This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2002).

Appeal from the District Court, Hennepin County, File No. CT-02-19668.

Bradley L. Doty, Jon R. Schindel, Stempel & Associates, PLC, (for appellant).

Amy J. Doll, Fluegel, Helseth, McLaughlin, Anderson & Brutlog, Chtd., (for respondent).

Considered and decided by Klaphake, Presiding Judge; Harten, Judge; and Parker, Judge.^*

UNPUBLISHED OPINION

HARTEN, Judge.

Respondent insured was involved in a collision while driving a car insured by appellant. Appellant filed a complaint for declaratory relief against respondent, seeking to void the policy and recover the amount of benefits paid to date, asserting that respondent made a material misrepresentation on her policy application. Both parties moved for summary judgment. Because the district court properly applied the law in granting respondent summary judgment, we affirm. We also grant respondent's motion to strike.

FACTS

Respondent Paula Goldstein applied for automobile insurance with appellant Western National Mutual Insurance Company. Appellant alleged that some information on the first application was incomplete, and respondent filled out a second application that was accepted. It asked applicants to list "names of all residents of household licensed or not." Respondent listed herself and her three-year-old daughter. At the time respondent's application was completed, she was living in an apartment with three other people: her daughter; Steve Maxey, who was not related to respondent by blood or marriage; and Maxey's son.

Respondent was involved in a collision while driving her car in which her daughter and Maxey were passengers. Maxey was no longer living with respondent at the time of the collision. All three sought benefits under respondent's insurance policy. Appellant paid respondent medical benefits of $11,218.20 for herself and $3,862.99 for her daughter. Appellant filed a complaint for declaratory relief against respondent, seeking an examination under oath regarding her policy. At the examination, appellant's attorney asked respondent to describe her relationship with Maxey. Respondent explained that Maxey first moved in with her as a personal care attendant (PCA). They then dated for about 18 months, but the relationship was unsuccessful. Respondent stated that Maxey continued to live with her as a PCA for some time after the relationship failed and was listed on the lease as such at her landlord's request.

Maxey's attorney sent appellant a demand to settle his claim. Appellant answered that it would respond to the demand pending the outcome of the declaratory action against respondent. Appellant then filed an amended complaint against respondent, seeking to void the policy and recover the amount of benefits paid to date, asserting that respondent made a misrepresentation of material fact by failing to list Maxey as a resident of her household. Appellant moved for summary judgment. Respondent also moved for a summary judgment that the policy was valid to cover the collision and seeking costs and attorney fees. The district court granted respondent's motion and awarded costs and attorney fees. Appellant now challenges this award and the denial of its motion; respondent moves to strike portions of appellant's brief.

DECISION

"On an appeal from summary judgment, we ask two questions: (1) whether there are any genuine issues of material fact and (2) whether the lower court erred in [its] application of the law." State by Cooper v. French, 460 N.W.2d 2, 4 (Minn. 1990). The reviewing court must view the evidence in the light most favorable to the party against whom judgment was granted. Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn. 1993). The question of whether an insurer has a duty to defend is a legal question subject to de novo review. Metro. Prop. & Cas. Ins. Co. v. Miller, 589 N.W.2d 297, 299 (Minn. 1999). Interpretation and application of an insurance policy to the facts in a case are reviewed de novo. Am. Family Ins. Co. v. Walser, 628 N.W.2d 605, 609 (Minn. 2001).

1. Insurance Policy

Appellant contends that respondent's policy is void because (1) respondent misrepresented material facts on her policy application, and (2) respondent's failure to list Maxey as a member of her household increased appellant's risk of loss.

An intentional, material, factual misrepresentation on an insurance application violates Minn. Stat. § 60A.08, subd. 9 (2002), and thereby voids the policy.¹ The burden of proof for alleged factual misrepresentations is on the insurer. Proprietors Ins. Co. v. Northwestern Nat'l Bank, 374 N.W.2d 772, 776 (Minn. App. 1985). Appellant argues that respondent's failure to list Maxey as a member of her household on her application was such a misrepresentation.

The application asked respondent to list "names of all residents of household licensed or not," but did not define "all residents of household." Under Minnesota caselaw, persons unrelated by blood or marriage to an insured are not considered residents or members of the same household. Bartholet v. Berkness, 291 Minn. 123, 126, 189 N.W.2d 410, 412 (1971) (unrelated friends living as roommates were not "member[s] of the same household"); Kruse v. Minn. Auto. Assigned Claims Bureau, 371 N.W.2d 602, 605 (Minn. App. 1985) (the phrase "members of the owner's household" did not include an owner's fiance who moved into the owner's home thirteen days before an accident, because she was unrelated by blood or marriage), review denied (Minn. 18 Oct. 1985); see also Mickelson v. Am. Family Ins. Co., 329 N.W.2d 814, 816 (Minn. 1983) (a man and a woman who lived together for seven years, commingled incomes, and shared expenses, were not "relative[s]" for auto insurance purposes because they were not connected by "blood, marriage, or adoption").

Minnesota courts have adopted a three-part test to determine whether a person is a resident of another's household: (1) living under the same roof; (2) in a close, intimate and informal relationship; and (3) where the intended duration is likely to be substantial, consistent with the informality of the relationship, and from which it is reasonable to conclude that the parties would consider the relationship in contracting about insurance. Johnson v. Am. Econ. Ins. Co., 419 N.W.2d 126, 128 (Minn. App. 1988) (quotation omitted); accord Lott v. State Farm Fire & Cas. Co., 541 N.W.2d 304, 307-08 (Minn. 1995); Vierkant v. AMCO Ins. Co., 543 N.W.2d 117, 122 (Minn. App. 1996), review denied (Minn. 28 Mar. 1996). The first two Pamperin factors are generally satisfied if the individuals in question "dwell together as a family under the same roof." Johnson, 419 N.W.2d at 128 (quotation omitted). Further, whether a policy uses the term "resident" or "member" of the household, or both, Minnesota caselaw uses the same factual analysis. See, e.g., Skarsten v. Dairyland Ins. Co., 381 N.W.2d 16, 19 (Minn. App. 1986) (whether a person is a resident or member of the household is dependent on the Pamperin test), review denied (Minn. 27 Mar. 1986).

While respondent and Maxey did live under the same roof at the time of the application, their arrangement did not rise to the level of "family." The two seemingly did not consider themselves a family while they were dating or after their relationship failed. Even if this relationship could be construed as familial, the parties evidently had no plans that it would be of substantial duration. The dating relationship lasted only about 18 months, and Maxey moved out of respondent's home after two or three years. We note that the relationship between respondent and Maxey was not nearly as...